Japan govt sees inflation slowing next year, calls for BOJ coordination
By Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) -Japan's inflation will likely slow to around 1.5% next year when stripping away the effect of one-off factors, a government spokesperson said on Monday, calling on the central bank to work towards achieving its 2% inflation target.
The remarks came amid simmering market speculation that creeping inflation and robust wage growth will prod the Bank of Japan (BOJ) to tweak its yield control policy at a two-day rate review ending on Friday.
«Specific monetary policy means fall on the jurisdiction of the BOJ. But we hope it takes appropriate, necessary steps in close coordination with the government based on an understanding agreed upon in our joint statement,» government spokesperson Yoshihiko Isozaki told a news conference.
Under the joint agreement with the government signed in 2013 and re-confirmed by the current administration, the BOJ pledges to achieve 2% inflation at the earliest date possible.
In a mid-year review of its forecasts, the government said last week it expects overall consumer inflation to hit 2.6% for the fiscal year that began in April and 1.9% in 2024.
«The forecasts take into account the base-effect of the government's utility subsidies. Excluding the effect, we expect inflation to move around 1.5% in fiscal 2024,» Isozaki said, suggesting that trend inflation will fall short of the BOJ's target next year.
«We'd like to continue doing our utmost to achieve a positive cycle of wages and inflation, as well as growth and distribution, with an eye on ending deflation,» he said.
Isozaki's comments came in response to a question on whether the government saw conditions falling into place for the BOJ to phase out its massive stimulus.
The remarks differ
Read more on investing.com
